Investor and Analyst Reactions to Earnings Announcements of Related Firms: An Empirical Analysis

Sundaresh Ramnath

Journal of Accounting Research, 2002, vol. 40, issue 5, 1351-1376

Abstract: In this article I examine the response of investors and analysts of nonannouncing firms to the earnings report of the first announcers in the industry. The error in the earnings forecast of the first announcer is found to be informative about the errors in the contemporaneous earnings forecasts of subsequent announcers in the industry. However, investors and analysts do not appear to fully incorporate the information from the first announcers’ news in their revised earnings expectations for subsequent announcers. This apparent underreaction to the first announcers’ news leads to predictable stock returns for subsequent announcers in the days following the first announcement. Results of this study can be seen as further evidence of investor and analyst underreaction to publicly available information.

Date: 2002
References: Add references at CitEc
Citations: View citations in EconPapers (68)

Downloads: (external link)
https://doi.org/10.1111/1475-679X.t01-1-00057

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:joares:v:40:y:2002:i:5:p:1351-1376

Ordering information: This journal article can be ordered from
https://onlinelibrary.wiley.com/journal/1475679x

Access Statistics for this article

Journal of Accounting Research is currently edited by Philip G. Berger, Anna Costello, Luzi Hail, Valeri Nikolaev, Haresh Sapra, Laurence van Lent and Regina Wittenberg Moerman

More articles in Journal of Accounting Research from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().